shall be laid, unless in proportion to the census or enumeration hereinbefore directed to be taken; 18 and (3) that "no tax or duty shall be laid on articles exported from any State.19 The implied limitations upon the federal taxing power are those that relate to the general, if not absolute, exemption of state governmental agencies from federal interference, whether by way of taxation or otherwise,20 and those arising out of all the express limitations upon the Federal Government, which, of course, are as operative when the Federal Government is exercising its taxing powers, as it is when employing any of the other rights possessed by it. Thus, for example, the United States may not, under the guise of a tax, take property without due process of law. § 267. Due Process of Law and Taxation. We have already seen that the taking of private property by the State in exercise of the taxing power is not brought within the constitutional requirement, applicable in the case of property taken under the power of eminent domain, that direct pecuniary compensation therefor shall be made. In like manner the taking of private property in the form of taxes, is not, in itself, a taking of property without due process of law. In Davidson v. New Orleans21 the Supreme Court after considering the meaning of the phrase "due process of law" as employed in the Fourteenth Amendment, and after adverting to the difficulty of stating affirmatively and completely the protection afforded by it, go on to say that they can at least state some of the cases which do not fall within its application, and among these, they say, "we lay down the following propositions as applicable to the case before us: that whenever by the laws of a State, or by state authority, a tax, assessment, servitude, or other burden is imposed upon property for the public use, whether it be of the whole State or of some more limited portion of the 18 Art. I, Sec. VII, Cl. 4. 19 Art. I, Sec. VIII, Cl. 5. 20 See Sections 57-60. 21 96 U. S. 97; 24 L. ed. 616 community, and those laws provide for a mode of confirming or contesting the charge thus imposed, in the ordinary courts of justice, with such notice to the person or such proceeding in regard to the property as is appropriate to the nature of the case, the judgment in such proceedings cannot be said to deprive the owner of his property without due process of law, however obnoxious it may be to other objections. It may violate some provision of the state Constitution against unequal taxation, but the Federal Government imposes no restraints on the States in that regard. . . . It is said that plaintiff's property had previously been assessed for the same purpose, and the assessment paid. If this be meant to deny the right of the State to tax or assess property twice for the same purpose, we know of no provision in the federal Constitution which forbids this, or which forbids unequal taxation by the States. If the act under which the former assessment was made is relied on as a contract against further assessments for the same purpose, we concur with the Supreme Court of Louisiana in being unable to discover such a contract." From the foregoing it is apparent that the taking of private property in the form of taxes is not, in itself, a taking of private property without due process of law because no direct compensation is made for the property thus taken. Though the taking of the property in the form of a tax is thus not in itself a taking without due process, it may become such by reason of the purpose for which, or the manner in which, the tax is levied, assessed and collected. Due process of law obliges the United States as well as the individual States, in the exercise of their taxing powers, to conform to the following rules: 1. That the tax shall be for a public purpose. 2. That it shall operate uniformly upon those subject to it. 3. That either the person or the property taxed shall be within the jurisdiction of the government levying the tax. 4. That in the assessment and collection of the tax certain guarantees against injustice to individuals, especially by way of notice and opportunity for a hearing, shall be provided. § 268. Taxation Must Be for a Public Purpose. A tax being in the eyes of the law an enforced contribution upon persons or property to raise money for a public purpose, it follows that where this public purpose is absent, the contribution sought to be enforced cannot be justified as a tax but amounts to an attempt to take property without due process of law. The validity of this proposition is beyond dispute, but judicial records furnish comparatively few instances of tax levies being held void for this reason. This is due, in the first place, to the fact that not often do the laws expressly state the purpose for which a tax is levied; and, in the second place, where this purpose is stated, the courts will, in deference to the legislative judg ment, construe the purpose to be a public one if it is possible to do so. In Broadhead v. City of Milwaukee the Supreme Court of Wisconsin say: "To justify the court in arresting the proceedings and declaring the tax void the absence of all possible public interest in the purpose for which the funds are raised must be clear and palpable to every mind at the first blush." A leading federal case with reference to this subject is that of Loan Association v. Topeka. This case did not involve a law levying a tax, but one authorizing towns to issue bonds payable to private manufacturing companies to encourage and aid them in establishing their plants within their respective limits. It was held by the court that inasmuch as taxes would have to be levied for the payment of these bonds, the law in effect attempted to authorize the towns to levy taxes in aid and encouragement of a private enterprise and was, therefore, void. In its opinion the court say: "The subject of the aid voted to railroads by counties and towns has been brought to the attention of the courts of almost every State in the Union. It has been thoroughly discussed and is still the subject of discussion in those courts. It is quite true that a decided preponderance of authority is to be found in favor of the proposition that the legislatures of the States, unless restricted by some special provisions of their Con 22 19 Wis. 624. 23 20 Wall. 655; 22 L. ed. 455. stitutions, may confer upon these municipal bodies the right to take stock in corporations created to build railroads, and to lend their credit to such corporations. Also to levy the necessary taxes on the inhabitants, and on property within their limits subject to general taxation, to enable them to pay the debts thus incurred. But very few of these courts have decided this without a division among the judges of which they were composed, while others have decided against the existence of the power altogether. State v. Wapello, 13 Iowa, 388; Hanson v. Vernon, 27 Ia. 28; Sharpless v. Mayor, 21 Pa. St. 147; Whiting v. Fond du Lac, 25 Wis. 188. In all these cases, however, the decision has turned upon the question whether the taxation by which this aid was afforded to the building of railroads was for a public purpose. Those who came to the conclusion that it was, held the laws for that purpose valid. Those who could not reach that conclusion held them void. In all the controversy this has been the turning point of the judgments of the courts. And it is safe to say that no court has held debts created in aid of railroad companies by counties as valid on any other ground than that the purpose for which the taxes were levied was a public use, a purpose or object which it was the right and the duty of state governments to assist by money raised from the people by taxation. The argument in opposition to this power has been, that railroads built by corporations organized mainly for the purpose of gain the roads which they built being under their control, and not that of the State—were private and not public roads, and the tax assessed on the people went to swell the profits of individuals and not to the good of the State, or the benefit of the public, except in a remote and collateral way. On the other hand, it was said that roads, canals, bridges, navigable streams and all other highways had in all times been matter of public concern. That such channels of travel and of the carrying business had always been established, improved, regulated by the State, and that the railroad had not lost this character, because constructed by private enterprise, aggregated into a corporation. We are not prepared to say that the latter view of it is not the true one, especially as there are other characteristics of a public nature conferred on these corporations, such as the power to obtain right of way, their subjection to the laws which govern common carriers, and the like, which seem to justify the proposition. Of the disastrous consequences which have followed its recognition by the courts and which were predicted when it was first established there can be no doubt. But in the case before us, in which the towns are authorized to contribute aid by way of taxation to any class of manufacturers, there is no difliculty in holding that this is not such a public purpose as we have been considering. If it be said that a benefit results to the local public of a town by establishing manufactures, the same may be said of any other business or pursuit which employs capital or labor. The merchant, the mechanic, the inn-keeper, the banker, the builder, the steamboat owner are equally promoters of the public good, and equally deserving the aid of the citizens by forced contributions. No line can be drawn in favor of the manufacturer which would not open the coffers of the public treasury to the importunities of two-thirds of the business men of the city or town." The purpose for which local governing bodies may be authorized to lay and collect taxes must be not only public in character, but must, generally speaking, relate strictly to the locality concerned. In other words, a State may not compel a local body to levy a local tax for the benefit wholly or in considerable part of another community.24 66 24 In Morford v. Unger (8 Iowa, 82) the Supreme Court of Iowa say: Conceding to the General Assembly a wide range of discretion as to the objects of taxation, the kind of property to be made liable, and the extent of the territory within which the local tax may operate, there must be some limit to this legislative discretion, which, in the absence of any other criterion, is held to consist in the discrimination to be made between what may reasonably be deemed a just tax, one which a just compensation is provided in the objects to which it is to be devoted, and that which is palpably not a tax, but which, under the form of a tax, is the taking of private property for the public use without just compensation. If there be such a flagrant and palpable departure from equality in the burden imposed, if it be imposed for the benefit of others, and for purposes in which those objecting have no interest, and are, therefore, not bound to contribute, it is no matter |